Our Next President?

[dcarrigg]

Re: bureaucratic overhead

what do you figure would be the price on an iphone manufactured in los angeles? then go back and lower all those numbers, because they couldn't sell anything like the volume they sell now.

I'm not so sure. Presumably a couple of things could happen. Could be much higher domestic demand for labor leads to higher domestic wages. Higher domestic wages could lead to greater domestic consumer demand. And/or an overall shift in expenses that makes iPhones and laptops and jeans and t-shirts more expensive could put downward pressure on rents and housing expenses. The combined effect could simply be significantly higher overall domestic growth. It doesn't necessarily have to be zero sum.

But that's neither here nor there. I mean, this isn't a forward-looking proposition. I'm not advocating for it, and I realize it's not happening. The point was simply to illustrate how policy has manufactured the need to look for growth and revenue elsewhere. Typically in places like finance, insurance, meds, eds, rents, fees, IP, and real estate.

[dcarrigg]

Re: bureaucratic overhead

Here's another way to think about it:

US median one bedroom rent's around $1,100 per month now. When the iPhone came out 12 years ago, it was about $900. Back in 1990 it was about $800. All adjusted for inflation to today's money. Macbook goes for about one month's rent today. Went for about $1,300 adjusted for inflation 12 years ago, closer to 6 weeks' rent. 1990 powerbook took you back $4,000, or 5 months' rent. All the while, median wages have been more or less flat. A pair of Levis cost $50 in 1990. 2 days' rent. They retail for $30 now. Maybe 18 hours' rent? You could probably make them with slave labor and cut quality back some and sell them for $20 to drop it to 12 hours' rent or something. But we're getting pretty near the end of the runway.

As it is now you owe your landlord like 40 pairs of jeans per month or 12 macbooks per year just to live in a squalid one-room hovel. Not so very long ago, used to be you only owed them 15 pairs of jeans per month or 2 powerbooks per year to live in the same place.

Say you were going to get dropped into a society, the high rent and low consumer good one, or the low rent and high consumer good one, which would you choose?

[shiny!]

Re: Our Next President?

Neither the left or right will prevail. A centrist fiscal conservative, social liberal will defeat the left and right that run both parties now.

Howard Schultz, the former CEO of Starbucks, might be your guy. He was on 60 Minutes last night, saying he was seriously considering a run as a "Centrist Independent" with ties to neither party. His net worth is over $ 3 billion, so he could bankroll his own campaign like Trump did.

On the fiscally conservative side, he's concerned about the national debt and said that while everyone needs affordable healthcare, the Democrat proposals of "free healthcare for everyone" is fiscally impossible. On the socially liberal side, he seems to be in favor of unrestricted immigration, for starters.

Interesting times, indeed.

[dcarrigg]

Re: Our Next President?

Gotta be honest, Shiny, this post just filled me with existential dread as I imagined the possibility 2020 could be a battle of the billionaires between Bloomberg, Shultz, and Trump or something. Just the three richest candidates in history, none of whom have ever had the foggiest idea within an order of magnitude what a gallon of milk or a bottle of laundry detergent cost.

[geodrome]

Re: Our Next President?

as far as i can tell, these articles are about raising the marginal rates of the INCOME tax. i didn't see [perhaps overlooked?] any reference to a WEALTH tax [like a national property tax but on all wealth, not just on real estate].

Straight from the horse's mouth:

"The ultra-rich have rigged our economy & rigged our tax rules. We need structural change. That’s why I’m proposing something brand-new: An annual wealth tax on the tippy-top 0.1%. We’d get $3 trillion in new revenue to invest in rebuilding the middle-class. Let’s make it happen."

https://twitter.com/ewarren/status/1...946817/video/1

[shiny!]

Re: Our Next President?

Gotta be honest, Shiny, this post just filled me with existential dread as I imagined the possibility 2020 could be a battle of the billionaires between Bloomberg, Shultz, and Trump or something. Just the three richest candidates in history, none of whom have ever had the foggiest idea within an order of magnitude what a gallon of milk or a bottle of laundry detergent cost.

I hope I didn't give you the impression that I was supporting Schultz, because I don't. To be fair though, I don't think that any of the politicians who might throw their hat into the ring have an inkling of those things, either. Aside from perhaps A-O-C, when was the last time that ANY politician from either side had to live on an average worker's wages?

[jk]

Re: Our Next President?

Straight from the horse's mouth:

"The ultra-rich have rigged our economy & rigged our tax rules. We need structural change. That’s why I’m proposing something brand-new: An annual wealth tax on the tippy-top 0.1%. We’d get $3 trillion in new revenue to invest in rebuilding the middle-class. Let’s make it happen."

https://twitter.com/ewarren/status/1...946817/video/1

yep, there it is. thanks for finding it.
looking for the cumulative wealth of the top 0.1%. the top TWENTY INDIVIDUALS had, in 2017, wealth equal to a trillion dollars. to be in the top 0.1% you need a minimum net worth of $43million. as a group, the top 0.1% own 22% of ALL the wealth in this country. [not sure about how their international holdings are counted, or if that statistic means 22% of all the wealth owned by u.s. citizens].

so here's another factoid:
The financial position of the United States includes assets of at least $269.6 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP) as of Q1 2014.


so let's estimate that the top 0.1% are worth around $25trillion. [remember, just the top 20 individuals are worth a trillion. and that's a 2014 number, and we know what asset prices have done since then.] so if warren is looking for $3 trillion is that per year, or over 10 years? [these kinds of statements are often a 10year number.] if it's over 10 years we're talking about a little over a 1% tax if assets were at the 2014 level. the tax would be significantly lower based on 2019 values.

it's hard to call a property tax of less than 1% confiscatory.

[thriftyandboringinohio]

Re: Our Next President?

...it's hard to call a property tax of less than 1% confiscatory.

It's not hard at all.
You start by calling all taxes theft. Then convince millions of wage earners that such a tax would destroy the economy and throw them out of work.
Repeat it endlessly and millions of people come to believe it is true.
It has worked like a charm for 30 years and counting.

[Chris Coles]

Re: Our Next President?

It's not hard at all.
You start by calling all taxes theft. Then convince millions of wage earners that such a tax would destroy the economy and throw them out of work.
Repeat it endlessly and millions of people come to believe it is true.
It has worked like a charm for 30 years and counting.

Spot on!

[jk]

Re: Our Next President?

It's not hard at all.
You start by calling all taxes theft. Then convince millions of wage earners that such a tax would destroy the economy and throw them out of work.
Repeat it endlessly and millions of people come to believe it is true.
It has worked like a charm for 30 years and counting.

of course you're correct. otoh, if you say you're going to spend the $3 trillion on e.g. infrastructure people know you'll be creating a lot of jobs.

[Chris Coles]

Re: Our Next President?

yep, there it is. thanks for finding it.
looking for the cumulative wealth of the top 0.1%. the top TWENTY INDIVIDUALS had, in 2017, wealth equal to a trillion dollars. to be in the top 0.1% you need a minimum net worth of $43million. as a group, the top 0.1% own 22% of ALL the wealth in this country. [not sure about how their international holdings are counted, or if that statistic means 22% of all the wealth owned by u.s. citizens].

so here's another factoid:
The financial position of the United States includes assets of at least $269.6 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP) as of Q1 2014.


so let's estimate that the top 0.1% are worth around $25trillion. [remember, just the top 20 individuals are worth a trillion. and that's a 2014 number, and we know what asset prices have done since then.] so if warren is looking for $3 trillion is that per year, or over 10 years? [these kinds of statements are often a 10year number.] if it's over 10 years we're talking about a little over a 1% tax if assets were at the 2014 level. the tax would be significantly lower based on 2019 values.

it's hard to call a property tax of less than 1% confiscatory.

But now you really come to the central issue. My view is that 50 years ago the majority of base, grass roots investment, into the entire industrial base of the Western economies, (not just the US), came from the excess funds held by the successful; that first stage investment into all those millions of tiny start up businesses, came from the concept that it was a duty of those holding spare cash; to invest into their nation.

Not a sign of anything like that today. Now, everyone wants to be in on the very best chance of adding to that wealth; with no consideration of the long term effects upon the base of the economy.

Here in the UK there is a historical record from the 19th century of the investors in a tunnel under the Thames river in London, having a dinner party in the tunnel; they were not anyone we might today call the .1%; they were just people that invested. Again, the Eiffel Tower in Paris was built with funds raised from investors. Not hedge funds, not venture capitalists, no bank in sight; just small investors.

When we describe the .1% no one takes account of the lost investment.

[Chris Coles]

Re: bureaucratic overhead

Yeah, I think you're onto something with this idea for the US too. It's not just the random desire to use GDP as a political yardstick. It's actually part of the policy rule-kit now. Congressional Budget Office scoring that's mandated for certain bills and certain Senate maneuvers to drop voting thresholds from 60 to 50+ votes are hitched to GDP measures. So the system for passing legislation is hard wired to GDP in that way. The there are the additional rules, like paygo, that Congress imposes upon itself that combine with the GDP scoring to actually prevent them from ever doing anything transformative that really makes a big impact on GDP. So they can't take up bills that would spend enough to really jam the growth lever up to 6% like back in the 1960s or something. But they also can't do anything that CBO projections say would lower it off the 2% growth baseline too much. And of course, this was not true just a short decades ago. But now every 10 year period pretty much has to average between 1 and 3% GDP growth, or you're violating one rule or another in Congress. This is also partly why they've had such a damned horrific time actually passing serious infrastructure bills, even if both Obama and Trump say they wanted it.

But even on a second level, it occurs that if you're measuring GDP so carefully, and you have free trade agreements designed to ship all the manufacturing jobs overseas to lower-labor-cost jurisdictions, and you simultaneously have an international myth that manufacturing isn't important anymore and the developed world has moved beyond it into a new historical era called the 'service economy,' then you desperately have to find ways to get things that were happening anyways onto the books to keep up the figures. So you make work. Not only with the Graeber style Bullshit Jobs thing. But by commercializing parts of life that were not commercialized before. As I was going on before, rent a room to a stranger on AirBnB and use the money to hire a home health care aide, and you're creating a lot of GDP. Have a friend move in for free who also helps out around the house as a friend, and you're creating zero GDP. The same amount of work is being done either way. But one generates a ton of tax revenue and official statistical economic activity. The other generates none of that, but creates a real human bond between people who actually care about each other instead. So everything must be bent towards incentivizing the first arrangment and discouraging the latter. This is a big reason why Putnam found all the stuff in Bowling Alone that he found, I think. "The service economy" is really just the commercialization of previously non-commercial human interactions. It's the "marketization" of life. Manufacturing hasn't become any less important. The economy hasn't moved beyond it. Try getting through a day without any manufactured goods. It's just where manufacturing is done and what people are paid to do it has changed dramatically. So in lieu of these types of jobs, as you say, we've got to convolute and commercialize things.

And this has further implications too--notice how, on this side of the pond at least, the corporate rates and the share of total revenue generated by corporate taxation is way, way down. The top marginal rates too and the share generated by the top 0.1% is way, way down too. Just compared to 5 years ago it's down. Compared to 15 more so. Compared to 30 even more so, etc. Since Reagan, and I'm guessing since Thatcher over there. And this isn't even considering the tax revenue lost to offshoring. Imagine if iPhones were manufactured in Los Angeles instead of in Shenzhen. That'd be what? 350,000 jobs? Even at LA minimum wage, it'd be $25,000 per year per job, assuming they only pay 5% income tax on that (an unlikely low number, but possible), that's about $4.5 billion in annual tax revenue. At a minimum. If everyone made the lowest legal wage and paid the lowest tax share they could. That's not counting state taxes. That's not counting the Social Security Trust Fund payroll taxes. It's not counting Medicare contributions for 65+ healthcare. That would all add up to much more. $25 billion per year wouldn't be out of the question when it's all said and done. Of course, with a company as big as Apple, that's what? 9% of their revenue or something? So that sounds about right for back of the envelope guesswork to me, since it'd clearly force a significant price increase for the knick knacks and doo dads. But when you add it all up, it's a whole lot of tax revenue lost. Government gives up a ton of revenue by allowing extremely low corporate tax rates and top marginal rates in conjunction with frictionless offshoring of manufacturing jobs. If they don't change laws to promote "the service economy" and promote commercializing previously non-commercial activity, and if them and the private sector don't engage in make-work schemes full of infographics and grant competitions, etc, then how the hell else would anything work? If you were focused on GDP, it certainly wouldn't.

And we all know what happened to Robert Kennedy.....

Again, I will argue that you may not be accurate when describing minimum wages; these boosts to GDP here in the UK involve as many as possible high level wage earners being added to the likes of the NHS. Indeed, you yourself described high cost wage earners in schools.

Apart from that, yes, we are on the same page; the drive to increase GDP is the primer of choice for any increase in economic output. Too much of a supposedly good thing will, inevitable, come back to haunt all of us.

And then I remembered how Henry Ford paid all his workers high wages so they could afford to buy his cars. We are turning full circle.

[jk]

Re: Our Next President?

But now you really come to the central issue. My view is that 50 years ago the majority of base, grass roots investment, into the entire industrial base of the Western economies, (not just the US), came from the excess funds held by the successful; that first stage investment into all those millions of tiny start up businesses, came from the concept that it was a duty of those holding spare cash; to invest into their nation.

Not a sign of anything like that today. Now, everyone wants to be in on the very best chance of adding to that wealth; with no consideration of the long term effects upon the base of the economy.

Here in the UK there is a historical record from the 19th century of the investors in a tunnel under the Thames river in London, having a dinner party in the tunnel; they were not anyone we might today call the .1%; they were just people that invested. Again, the Eiffel Tower in Paris was built with funds raised from investors. Not hedge funds, not venture capitalists, no bank in sight; just small investors.

When we describe the .1% no one takes account of the lost investment.

with slack demand no one wants to build capacity. the trillion dollar tax cut, mostly for corporations, has spurred NO increase in capital spending and NO increase in wages. it all went into stock buybacks to goose executive bonuses and make the wealthy wealthier.

so excess funds just go sloshing around the financial markets and mostly don't make it into the real economy at all.

[jk]

Re: Our Next President?

here's a little info re eliz warren's proposal:
The plan, which would impose an annual 2 percent wealth tax on fortunes greater than $50 million and a 3 percent tax on ones greater than $1 billion,

[dcarrigg]

Re: Our Next President?

Oh, no, I didn't get that impression. It's just what popped in my head.